Who's Buying Now?

It's a new week, and that means it's time to check out the most interesting insider purchases of the past seven days. After reading through numerous filings using insider tracking tool Form 4 Oracle, I offer up my top five.

The week's buying

Company

Closing price 1/31/06

Total value
of stock purchased

52-week change

Citigroup
(NYSE: C  )

$46.58

$11,727

(5%*)

General Electric (NYSE: GE  )

$32.75

$494,250

(9%*)

General Motors (NYSE: GM  )

$24.06

$262,755,500

(35%*)

Mosaic
(NYSE: MOS  )

$15.46

$80,325

(6%)

Urstadt Biddle
(NYSE: UBP  )

$16.77

$209,601

(5%*)

Sources: Fool.com, Yahoo! Finance, Form 4 Oracle, SEC filings.
*Returns adjusted to reflect the impact of dividends.

Dirty, smelly, beautiful
We begin this week with a reminder that the best stocks are often those that the Street ignores. This is especially true of small caps, and that's exactly why the two portfolios found in Motley Fool Hidden Gems are smashing the market by more than 25% each. But there are large caps that fit this description, too.

Consider Mosaic. This $8.4 billion company operates dozens of mines for collecting potash, phosphates, and nitrogen that can then be made into feed and fertilizer products. Talk about your boring business. Its products stink -- literally! No wonder the stock has bounced up and down like a rubber ball over the past year.

Keep holding your nose. The company's exposure to both Mother Nature and the whims of farmers (American farmers make up its biggest chunk of customers) came into sharp relief just hours before I began writing today. It seems that three Florida mines are to be curtailed because of a lack of demand. The four-week "furlough," as the company is calling it, is intended to help match production with manufacturing. In other words, farmers aren't buying enough of the smelly stuff.

Worse, the news comes just 24 hours after the resolution of a disaster in Saskatchewan involving the company's Esterhazy potash mine. This past Sunday, 72 of the company's workers were trapped a kilometer underground when a fire broke out. The incident ended happily, with every miner brought to the surface safely, but the fire may end up hurting production, according to Reuters.

You'd think with all that, and a not-so-great first quarter report, investors would be heading for the hills. But they aren't. Instead, they're buying. The stock is up more than 1% for the day as I write. It's impossible to know who all these brave souls are, but thanks to filings with the Securities and Exchange Commission, we know the identity of one: Fritz Corrigan, Mosaic's CEO. Last Thursday, he bought 5,250 shares on the open market for $15.30 per stub, increasing his direct holdings just about a notch over 50%.

That's impressive. But more interesting to me is that he must have known about the forthcoming furlough and that hard times could be ahead. Yet, apparently, he doesn't believe the future is going to be as difficult as most think. He may have a point. A check of the key statistics at Yahoo! Finance shows that Mosaic trades for less than 12 times next year's earnings. That's cheaper than peers such as Potash (NYSE: POT  ) and far lower than both its historic and projected earnings growth rates. In other words, Corrigan could be buying at precisely the right time.

Regardless, his purchase speaks volumes, and it's demonstrative of the kind of risk-sharing behavior that Tom Gardner and Bill Mann are looking for in Hidden Gems. (Take a free trial if you'd like to learn more.) So, go ahead, color me several shades of curious about Mosaic. And in the meantime, put the stock on my watch list.

Winter in the Citi
Those who read this column regularly know that I take CEO buys more seriously than I do others, and I certainly afford them more weight than I give purchases from hedge funds and private equity firms. That's because CEOs have a unique view of their companies. The best among them have their hands on the levers that control the delivery of value. In buying stock, they're saying, "I know we're creating value that the market will pay for."

Is that what's on the mind of Charles Prince, CEO of Citigroup? Maybe. Or maybe he read Stephen Simpson's sharp analysis of the stock. Maybe he's even interested in the increased dividend. (At last check, his 1,497,827 shares are due to pay out $2.94 million annually. Yowza!)

Turns out, it's none of the above. Prince's buy wasn't really even his buy. The 250 shares purchased in his name were bought by one of his teenage kids. And I say: How incredibly Foolish! Get 'em started young, Chuck.

That's all for this week. See you back here next week, when we dig through more insider deals in search of the next home run stock.

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Fool contributorTim Beyersusually favors two scoops of ice cream over the inside scoop. Tim didn't own shares in any of the companies mentioned in this story at the time of publication. You can find out what is in his portfolio by checking Tim's Foolprofile. The Motley Fool has an ironcladdisclosure policy.


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